Central Bank: Irish economy continues to perform

Ireland Online:

The Central Bank said today that the Irish economy is continuing to perform well as it published its annual report for 2004.

Speaking at a press briefing to launch the annual report, Central Bank Governor John Hurley said that they forecast growth of 5.25% GNP (GDP 5.5%) this year, about the same as 2004.

Mr Hurley said: "Most indicators would point to the Irish economy continuing to grow strongly at a rate of about 5% over the next few years.

"As a very open economy, the performance of Ireland is significantly dependent on the global economy, the prospects for which are broadly favourable."

The Governor welcomed the development of a lower inflation environment in Ireland but said: "It is necessary now to embed the low inflation regime that we have experienced in order to protect our competitiveness".

"Internationally we have seen a sharp increase in oil prices and uncertainties remain in this regard. Unfavourable moves in exchange rates could also impact on growth.

"Domestically, there are also some risks, the main ones being the high and growing level of indebtedness, threats to competitiveness and the expanded construction sector."

He welcomed the recent slowdown in house price rises but said the main concern now is both the rapid growth and high level of indebtedness in the economy.

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